MetLife 2006 Annual Report Download - page 149

amended) and in privately negotiated transactions. As a result of the acquisition of Travelers, the Holding Company had suspended its
common stock repurchase activity. During the fourth quarter of 2006, as announced, the Holding Company resumed its share repurchase
program. Future common stock repurchases will be dependent upon several factors, including the Company’s capital position, its financial
strength and credit ratings, general market conditions and the price of the Company’s common stock.
On December 1, 2006, the Holding Company repurchased 3,993,024 shares of its outstanding common stock at an aggregate cost of
$232 million under an accelerated common stock repurchase agreement with a major bank. The bank borrowed the common stock sold to
the Holding Company from third parties and purchased the common stock in the open market to return to such third parties. In February
2007, the Holding Company paid a cash adjustment of $8 million for a final purchase price of $240 million. The Holding Company recorded
the shares initially repurchased as treasury stock and recorded the amount paid as an adjustment to the cost of the treasury stock.
On December 16, 2004, the Holding Company repurchased 7,281,553 shares of its outstanding common stock at an aggregate cost
of $300 million under an accelerated common stock repurchase agreement with a major bank. The bank borrowed the stock sold to the
Holding Company from third parties and purchased the common stock in the open market to return to such third parties. In April 2005, the
Holding Company received a cash adjustment of $7 million based on the actual amount paid by the bank to purchase the common stock,
for a final purchase price of $293 million. The Holding Company recorded the shares initially repurchased as treasury stock and recorded
the amount received as an adjustment to the cost of the treasury stock.
See Note 12 regarding stock purchase contracts issued by the Holding Company on June 21, 2005 in connection with the issuance of
thecommonequityunits.
The Company acquired 8,608,824, 0 and 26,373,952 shares of the Holding Company’s common stock for $500 million, $0 and
$1.0 billion during the years ended December 2006, 2005 and 2004, respectively. During the years ended December 31, 2006, 2005 and
2004, 3,056,559, 25,049,065 and 1,675,814 shares of common stock were issued from treasury stock for $102 million, $819 million and
$50 million, respectively, of which 22,436,617 shares with a market value of $1 billion were issued in connection with the acquisition of
Travelers on July 1, 2005. See Note 2. At December 31, 2006, the Holding Company had $216 million remaining on the October 26, 2004
common stock repurchase program which was subsequently reduced by $8 million to $208 million after the February 2007 cash
adjustment on the accelerated stock repurchase discussed above.
The table below presents declaration, record and payment dates, as well as per share and aggregate dividend amounts, for the
common stock:
Declaration Date Record Date Payment Date Per Share Aggregate
Dividend
(In millions,
except per share data)
October 24, 2006 November 6, 2006 December 15, 2006 $0.59 $450
October 25, 2005 November 7, 2005 December 15, 2005 $0.52 $394
September 28, 2004 November 5, 2004 December 13, 2004 $0.46 $343
Dividend Restrictions
The table below sets forth the dividends permitted to be paid to the Holding Company without insurance regulatory approval and
dividends paid to the Holding Company:
Company Permitted w/o Approval(1) Paid(2) Permitted w/o Approval(1) Paid(2) Permitted w/o Approval(4)
2005 2006 2007
(In millions)
MetropolitanLife.............................. $880 $3,200 $863 $ 863 $919
MetLifeInsuranceCompanyofConnecticut ............ $ — $ — $ — $ 917(3) $690
Metropolitan Tower Life Insurance Company . . . . . . . . . . . . $ 54 $ 927 $ 85 $2,300 $104
Metropolitan Property and Casualty Insurance Company . . . . $187 $ 400 $178 $ 300 $ 16
(1) Reflects dividend amounts paid during the relevant year without prior regulatory approval.
(2) Includes amounts paid including those requiring regulatory approval.
(3) Includes a return of capital of $259 million.
(4) Reflects dividend amounts that may be paid during 2007 without prior regulatory approval. If paid before a specified date during 2007,
some or all of such dividend amounts may require regulatory approval.
Under New York State Insurance Law, Metropolitan Life is permitted, without prior insurance regulatory clearance, to pay stockholder
dividends to the Holding Company as long as the aggregate amount of all such dividends in any calendar year does not exceed the lesser
of: (i) 10% of its surplus to policyholders as of the end of the immediately preceding calendar year; or (ii) its statutory net gain from
operations for the immediately preceding calendar year (excluding realized capital gains). Metropolitan Life will be permitted to pay a cash
dividend to the Holding Company in excess of the lesser of such two amounts only if it files notice of its intention to declare such a dividend
and the amount thereof with the Superintendent and the Superintendent does not disapprove the distribution within 30 days of its filing.
Under New York State Insurance Law, the Superintendent has broad discretion in determining whether the financial condition of a stock life
insurance company would support the payment of such dividends to its shareholders. The New York State Department of Insurance (the
“Department”) has established informal guidelines for such determinations. The guidelines, among other things, focus on the insurer’s
overall financial condition and profitability under statutory accounting practices.
Under Connecticut State Insurance Law, MICC is permitted, without prior insurance regulatory clearance, to pay shareholder dividends
to its parent as long as the amount of such dividends, when aggregated with all other dividends in the preceding 12 months, does not
exceed the greater of: (i) 10% of its surplus to policyholders as of the end of the immediately preceding calendar year; or (ii) its statutory net
F-66 MetLife, Inc.
METLIFE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)